Computation of Base Year

1. BASE YEAR
Weight Reference Year is July 2011 to June 2012, Price Reference Year (base year)
has been chosen to be calendar year.
• Reasons for this deviation are:
• Calendar year is adopted as base year internationally.
• Taking July 2011 to June 2012 is close the existing series was 2010.
• Some months of Financial year 2011 to March 2012 could not be
considered as these are preceded by weight reference year.

2. Compilation of Indices
• Compilation of CPI Consists of two stages.
• First, price indices are calculated for elementary aggregates, known as
Item Level Indices. These are lowest level of aggregation where prices
are combined into price indices.
• Secondly, these elementary prices are averaged to obtain higher level
of indices using consumption expenditure as weights.
• For this purpose Laspeyres index Formula is used.

3. Imputed Price
• If non- seasonal item is temporarily out of stock and no price is
reported, the price has to be imputed.
• The current month price is imputed by multiplying prices of the same
item with average price relative of current month and previous
month. Where, bothCurrent year prices and previous year prices are
available.
• The imputation is done within town in case of CPI (urban), within
state in case if CPI (rural).

4. In Case an Item is Substituted
there is a provision to provide special quotes. To indicate the
cases which are given below.
Cases. Special Codes
If there is no change in shop and item. 0
If shop is changed from origin to reserve. 1
If item is substituted at original shop. 2
If item and shop both are substituted. 3

5. New Base Price
• In the event of change of shop/Item/ both item and shop i.e. special
code being other than 0, adjustment in base price is made in the
following manner.
• New base price = price of new specification/Shop/Both of last month/
price of old specification shop of both last month Multiplied by old
base prices.

6. Dissemination of Indices
• The Consumer Price Index is released every month at 5:30 PM on 12th
day of following month.
• If, it is a holiday then it is released on the next working day.
• All India CPI( Rural, Urban, combined) are released through a press
note.
• Press note also contain state /UT -wise General Indices for rural,
urban and combined along with inflation rates. Uploaded on website
of Ministry of Statistics and programme implementation. GroupWise.
State UT Industries for rural urban combined also made available on
website for the users. www.mospi.gov.in.